Reuters / Gary Cameron
- House Democrats are poised to reintroduce a bill updating economic growth is measured.
- The “Measuring Real Income Growth Act” calls for “broadening the focus beyond GDP” when assessing economic growth.
- Democratic Senate leader Chuck Schumer plans to reintroduce the bill soon, the New York Times reported Sunday. The senator likened the current economic measurement tools to “still using a black-and-white television.”
- The legislation calls for the release of distributional data alongside GDP updates, allowing Americans to see which income groups reap the greatest rewards from economic expansion.
- Visit the Business Insider homepage for more stories.
House Democrats are set to reintroduce a bill updating how the US economy is measured – one intended to give Americans a look at who wins most when the economy grows.
The bill, sponsored by Rep. Carolyn Maloney of New York’s 12th District, calls for “broadening the focus beyond [gross domestic product]” when describing economic growth. Real GDP grew more than 3% annually from 2003 to 2005, yet the average income for half of individuals in the US fell over the same period, the bill said.
“In a country of 325,000,000 individuals, top-line GDP numbers do not capture the full range of household economic experiences and may be misleading,” the bill’s author wrote.
Democratic Senate leader Chuck Schumer plans to reintroduce the bill soon, the New York Times reported Sunday. The legislation calls for the release of distributional data alongside GDP updates, giving economists greater clarity around who reaps the greatest share of economic expansion. The new report would reveal the dollar amount of economic expansion in each of the 10 deciles of income and the highest 1% of income.
“The government is still using a black-and-white television,” Schumer told The Times. “We gotta catch up, so we get a more accurate picture.”
Economists at the Commerce Department have been looking into ways to measure the distribution of total personal income by different income groups. The Bureau of Economic Analysis plans to release prototypes of the new metrics by the end of 2020, according to an online statement.
Gross domestic product has long been criticized for its simplicity and inability to measure key factors like sustainability concerns or a rapidly expanding service sector. The statistic also glosses over quality-of-life shifts, obscuring the US’s significant wealth gap, the bill notes.
“Efforts to address slow wage growth, stagnant incomes, and growing economic inequality require broadening the focus beyond GDP and obtaining metrics that better correspond to the experiences of all families in the United States,” the bill says.
The bill’s short title is the “Measuring Real Income Growth Act” and is cosponsored by 22 other Democratic representatives.
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